The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
Minutes of actions taken by the Board of Governors of the Federal Reserve System on Tuesday, February 24, 1953. The Board met in the Board Room at 10:00 a.m. PRESENT: Mr. Mr. Mr. Mr. Mr. Mr. Martin, Chairman Szymczak Evans Vardaman Mills Robertson Carpenter, Secretary Sherman, Assistant Secretary Kenyon, Assistant Secretary Thurston, Assistant to the Board Riefler, Assistant to the Chairman Thomas, Economic Adviser to the Board Vest, General Counsel Noyes, Assistant Director, Division of Research and Statistics Mr. Cherry, Legislative Counsel Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. the signature of the There was presented a draft of letter for Chairman to Mr. Charles H. Kendall, General Counsel of the Office of request made by Mr. Defense Mobilization, prepared in response to the Kendall in a telephone conversation with Mr. Vest for the views of the 80ard on Bill S. 753, to provide stand-by economic controls, in connection with the preparation for hearings on the bill to be held by the Senate Ilan-king and Currency Committee. At the conclusion of a discussion, were during which several amendments al approv made to the draft, unanimous was given to a letter to Mr. Kendall in the following form: 401 2/24/53 -9- "This refers to your recent telephone call to the Board's General Counsel, in which you indicated that you would like, if possible, to obtain the viewpoint of the Board on Senator ic controls, Capehart's bill, S. 753, to provide standby econom Committee Senate the in connection with your preparation for hearings on this bill. "Title VI of the bill would provide standby authority ucfor regulation of consumer credit and real estate constr Deal the in origin tion credit on the same basis as provided ctions the restri fense Production Act of 1950 and without by the amendities author these of se exerci placed upon the 1952. t the Pefense Production Act enacted in 1951 and regulations Neither consumer credit nor real estate credit found it to ent Presid the unless r, could be imposed, howeve or economic ty securi al nation of st intere be necessary in the National Advisory Council stability, after consulting with the which would be established by this bill. te consumer "The Board is not seeking authority to regula If, however, Concredit or real estate credit at this time. standby powers giving ation legisl gress should wish to enact basis and without to the Board in these fields on a flexible and 1952 to the restrictions imposed by the amendments of 1951 the the Defense Production Act, the Board would not oppose enactment of such legislation. consumer and real "On the basis of past experience with much to be said is there that feels estate credit, the Board controls ive select these make for legislation which would a permanent part of the Board's authority to regulate credit, but the Board is rather than a part of a standby authority, ation at this legisl ent perman not prepared to recommend such time. ary credit restraint 'With respect to authority for volunt those expressed to r simila Programs, the Board's views are er credit and consum the in above with respect to authority the bill does that notes Board real estate credit field. The ity. author this not provide for an extension of June 30, 1954, "Title III of the bill would extend until to guaranment Govern the the authority of various agencies of h the throug cts, contra e tee loans for the financing of defens 2/24/53 -3- "instrumentality of the Federal Reserve System (the so-called V-loan Program). It is the impression of the Board that this program has been constructive and helpful to the guaranteeing agencies in facilitating defense procurement and that it should be continued. "The other proposals in this bill involve matters which do not fall primarily within the Board's province, and the Board has not taken a position with respect to them." At this point Messrs. Thurston, Riefler, Thomas, Vest, Noyes, and Cherry withdrew from the meeting. Prior to this meeting there had been sent to the members of the Board copies of a draft of statement outlining the qualifications of the President and First Vice President of a Federal Reserve Bank. The draft lfas prepared in connection with the study being made, pursuant to the understanding at the meeting on June 6, 1952, by a special committee of the Board (Messrs. Szymczak, Mills, and Robertson) with respect to executive training and development programs at the Federal Reserve. Banks, the level of employees' salaries under the job classification and salary adIflinistration program, and salaries of Reserve Bank officers. Governor Robertson suggested that the draft be amended in the follewd.ng respects: 1. By eliminating from the second paragraph on the first page a sentence reading as follows: "Should a President fall short in these qualifications and in executive and administrative ability, steps should be taken to replace him." 2. By eliminating from the following clause appearing on the fourth page the words underscored: "The First Vice President should be the chief operating_ officer of the bank and as such should:". 40.2; 2/24/53 -14- 3. By eliminating from the final paragraph, reading as follows, the portions underscored: "It is recognized that the above statement describes an ideal situation in which the resident would be qualified by training and experience to dischasge the primary responsibilities of the System in the monetary field and the first vice president would complement the president in relieving him of the operating details and would serve in fact as the chief operating officer of the Bank. This ideal arrangement may not always be possible because the man selected for president may have an opp_uting back,ground while the first vice president might be trained either in operations or in monetary policy and economics. So long as the position of the first vice president is continued in the law, the person holding that position should complement the president as much as possible so that whatever their training, experience, and background they will make a good 'team' and together discharge the responsibilities set forth above. In some cases the first vice president will be an understudy to the president and his likely vice successor. In other cases, however, the first ration administ in expert an president would be rather than a potential successor to the president." The amendments to the statement suggested by Governor Robertson were accepted, and the matter was discussed at some length in the light °f the concept of the duties and responsibilities of Reserve Bank presidents and first vice presidents, the functions of the Reserve Banks, the l elationship between the functions of the Board and the Reserve Banks, ' and the salaries fixed by the Board for presidents and first vice presidents of Reserve Banks in recent years. At the conclusion of the discussion, it was understood that further ec/nsideration of the statement would be deferred until after the next 2/24/53 -5- meeting of the Conference of Presidents of the Federal Reserve Banks. The meeting then adjourned. During the day the following ad- ditional actions were taken by the Board, with all of the members Present: Minutes of actions taken by the Board of Governors of the Federal Reserve System on February 20, 1953, were approved unanimously. rs, Chicago, Telegram to Mr. B. R. Prall, President, Butler Brothe Illinois, prepared pursuant to action taken at the meeting on February 19, 1953, and reading as follows: e System "Board of Governors of the Federal Reserv l ReFedera the of or direct has appointed you a Class C the of n portio red unexpi serve Bank of Chicago for the you ted appoin has term ending December 31, 1954, and ing portion of Deputy Chairman at the Bank for the remain telegram will t collec the year 1953. Your acceptance by be appreciated." Approved unanimously. Examinations Department, Letter to Mr. Quackenbush, Manager, Bank Federal Reserve Bank of New York, reading as follows: February 13, 1953, "As recommended in your letter of the the Board of Governors has extended to May 10, 1953, n Wester of time within which The Marine Trust Company in Neu York, Buffalo, New York, may establish a branch the Village of Lewiston, New York." Approved unanimously. General de Belgique, Brussels, Letter to the Banque de la Societe 8elguim, reading as follows: 2/24/5 3 -6- "This refers to correspondence between the Federal Reserve Bank of New York and Mr. William C. Pierce on your behalf, with respect to the status of Banque de la Societe Generale de Belgique, Brussels, Belgium, as a holding company affiliate if a bank to be known as the Belgian-American Bank & Trust Company, New York, N. Y., is organized and is admitted to membership in the Federal Reserve System. "The Board understands that the Banque de la Societe Generale de Belgique is a banking corporation organized and operating under the laws of Belgium; that Banque de la Societe Generale de Belgique owns stock in several other banks in Belgium; that Banque de la Societe Generale de Belgique controls the BelgianAmerican Banking Corporation, New York, N. Y., organized under Article XII of the Banking Law of New York for the purpose of facilitating the financing of foreign trade; that Banque de la Societe Generale de Belgique will be a holding company affiliate of Belgian-American Bank & Trust Company through direct and indirect control of a majority of the stock of such proposed e does not bank; that Banque de la Societe Generale de Belgiqu the stock tly, indirec or y directl , and will not own or control and that States; United the in of any other banking institution not and will does e Belgiqu de e General the Banque de is. Societe the in bank any tly, indirec or not manage or control, directly & Trust ComBank an -Americ Belgian United States other than the pany. ned that the "In view --)f these facts, the Board has determi ation of upon organiz e, Belgiqu Banque de la Societe Generale de of the on admissi and , Company the Belgian-American Bank & Trust will System, Reserve latter bank to membership in the Federal in holding not be engaged, directly or indirectly, as a business associabanking banks, the stock of or managing or controlling of the meaning within tions, savings banks, or trust companies ; and, accordamended as section 2(c) of the Banking Act of 1933, ingly, the Banque de la Societe Generale de Belgique will not be any purposes other deemed to be a holding company affiliate for than those of section 23A of the Federal Reserve Act. time differ from those "If, however, the facts should at any the Banque set out above to an extent which would indicate that be so ento deemed de la Societe Generale de Belgique might be The Board. the to gaged, this matter should again be submitted make and nation Board reserves the right to rescind this determi basis the on time a further determination of this matter at any 4.01: 2/24/53 -7- "of the then existing facts." Approved unanimously, for transmittal through the Federal Reserve Bank of New York. Letter to the Presidents of all Federal Reserve Banks reading as follows: "There have been forwarded to you today under separate cover the indicated number of copies of the following forms, a copy of each of which is attached, for use of State member banks and their affiliates in submitting reports as of the next call date: Number of copies Form F.R. 105 (Call No. 127), Report of condition of State member banks. Form F.R. 105e (Revised May 1948), Publisher's copy of report of condition of State member banks. Form F.R. 105e-1 (Revised May 1948), Publisher's copy of report of condition of State member banks. of affiliate Form F.R. 220 (Revised March 1952), Report ate. affili or holding company 2), Publisher's copy Form F.R. 220a (Revised March 195 g company affiliate. holdin or of report of affiliate used on December 31, those as "All of the forms are the same single-payment loan the in change 1952, with the exception of the letter of Decemour in ned items in Schedule AI which was mentio " ber 12, 1952, transmitting the year-end forms. Approved unanimously, with the understanding that the letters would be sent upon printing of the forms. Reserve Banks reading as Letter to the Chairmen of all Federal f0110Ws: l Reserve "The Standing Committee of Auditors of the Federa ations, of on Examin Divisi s Board' Banks, in consultation with the ient be conven would 1953, 27, has ascertained that May 25, 261 and 2/24/53 -8- "dates for the regular biennial Conference of Auditors, and the holding of such a conference at that time has been cleared with the Chairmen's Conference. Accordingly, a Conference of Auditors will be held on those dates at the Board's offices in Washington. "In accordance with established practice, the Standing Committee of Auditors plans to consider items for the agenda at a meeting to be held in April, and it is understood that Mr. John J. Endres, Chairman of the Committee, has requested the Reserve Bank Auditors to submit their suggestions with respect to topics for the agenda. Copies of the agenda will be furnished you as far in advance of the conference as possible. "It is suggested that each Reserve Bank be represented at the conference by the General Auditor or Auditor and his principal assistant. "It will be appreciated if you will inform the Board's s Division of Examinations of the names of the representative would they If of your Bank who will attend the conference. like to have us procure hotel accommodations in Washington for inform us of them, we would be pleased to do so if they will the time of their arrival. If the representatives have any to make arrangements preferences as to hotels we shall attempt accordingly." Approved unanimously) with the understanding that copies would be sent to the Presidents and Auditors of all Federal Reserve Banks.
@FedFRASER